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Confidential 1 Procurements Strategic Contribution Leadership vs Management 1 Richard May ArcBlue (NZ) Ltd November 2014 UK EUROPE AFRICA AMERICAS AUSTRALASIA ASIA

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Page 1: Procurements Strategic Contribution Leadership vs Management Speaker... · Procurements Strategic Contribution Leadership vs Management 1 Richard May ArcBlue (NZ) Ltd ... ArcBlue

Confidential

1

Procurements Strategic Contribution

Leadership vs Management

1

Richard May

ArcBlue (NZ) Ltd

November 2014

UK EUROPE AFRICA AMERICAS AUSTRALASIA ASIA

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Structure of this presentation

Leadership versus Management

The language of Procurement versus Business

Some personal thoughts

A

B

C

Meet a current procurement “leader”

Introduction

D

E

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ArcBlue is part of the global PMMS Consulting Group. We are a specialist consultancy group focusing upon the buyer:supplier interface. Since 1978, we have been supporting private and public sector organisations across the world to achieve more from the management of those resources external to an organisation on whom that organisation may rely.

About ArcBlue Consulting (NZ) Ltd A

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Meet Vince Aisthorpe – Manager Supply Chain B

Stanwell Corporation Queensland Australia State Owned Enterprise Electricity Generator

Supply

Strategic Procurement

Category Management

Logistics and Warehousing

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B Some background

• 2008 – Procurement Review

– CEO endorsed change programme – a key step

• 2011 – 2nd Procurement Review

– CFO comment. “Procurement is not strategic and cannot be in my

personal opinion”.

• 2014 – CFO is now CEO – Interview with CEO magazine

– “Stanwell has been working closely with suppliers to create value adding win-win arrangements. Thats something that has really evolved over the past couple of years and it really is a credit to our procurement strategy team to have achieved significant changes”.

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C Leadership vs Management

Management Order and Consistency

Leadership Change and Movement

Planning and Budgeting • Establish agendas • Set Timetables • Allocate Resources

Establishing Direction • Create a vision • Clarify big picture • Set strategies

Organising and Staffing • Provide structure • Make job placements • Establish rules and procedures

Aligning People • Communicate goals • Seek commitment • Build teams and coalitions

Controlling and Problem Solving • Develop incentives • Generate solutions • Take corrective action

Motivating and Inspiring • Inspire and energise • Empower sub-ordinates • Satisfy unmet and anticipated

needs

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Some examples of how Vince engages with exec team

CB

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Some examples of how Vince engages with exec team C

VISION

VALUED BUSINESS PARTNERS

DELIVERING TIMELY BEST OUTCOMES

AND VALUE THROUGH COMMERCIAL

SUPPLY SOLUTIONS

COLLABORATE Engage Early and Often

COMMIT Responsible and Accountable

COMPLETE Timely Best Outcome

Co

mm

un

ica

te

Safe, Responsible, Commercially Focused

MANTRA

KEY LEAD MEASURES

KEY PLANK MEASURE

SHAREHOLDER

$6M - $12M SUPPLIER RELATED BENEFITS

INVENTORY OPTIMISATION

OUTCOMES

EMPLOYEES

EVIDENCE OF IMPROVED

CAPABILITY FROM

LEARNING & DEVELOPMENT PROGRAM

CUSTOMERS AND COMMUNITY

POSITIVE CUSTOMER FEEDBACK

VALUE CHAIN EVIDENCE OF MORE

EFFECTIVE PROCUREMENT PROCESSES

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Leadership Styles C

Style Examples Challenges

Pacesetter

Authoritative

Coaching

Affiliative

Coercive

Democratic

Do as I do - now Can overwhelm

Come with me and be inspired

If team knows more than leader

Try this Problematic if change resistance

People come first Lack of direction & mediocre results

Do what I tell you Can alienate, stifle flexibility

What do you think? Takes longer, more consultation

V

V

V

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SDI – Leaders and their people C

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Different types of leaders in a change programme C

LINE LEADERS Line Leaders are those with accountability for results and sufficient authority

to undertake changes in the way work is conducted and organised at their local or project level.

INTERNAL NETWORKERS and COAL FACE LEADERS

Those internal networkers (engineers, project managers, HR, Training, Contract Managers, etc who participate in ongoing “communities of better practice” (Could be SASP or project procurement teams)

EXECUTIVE LEADERS

Have overall accountability for organisational performance. Recognise that “this ‘procurement change’ is a new ballgame”.

Vital for successful change through efforts to create organisational environment for continual innovation and knowledge generation.

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‘Procurement Change’ needs a end-to-end process, outcomes and benefits focused

D

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Needs a different language “at the top” – income statement C

Funding/ Revenue 100

Internal Costs (Labour) (30)

Bought in goods and services (56)

Margin 12 Other o’heads, Tax/int (3) Surplus 9

Investm’t in Funding/ Revenue 100

Investm’t in Internal Resources (30)

Investm’t in External Resources (56)

Margin 12 Other o’heads, Tax/int (3) Surplus 9

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Needs a “Business Value Chain” approach D

ACQUIRE VALUE

Sources of

EXTERNAL RESOURCE

BUILD VALUE

Sourcse of

INTERNAL RESOURCE

Deliver perceived

VALUE

SUPPLIER/

PROVIDER

SUPPLIER/ PROVIDER Organisation

INITIAL

CUSTOMEr

Or FUNDER

Ultimate

Customer

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It requires a longer-term view D

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Recognises that one size does not fit all D

Looking out into Supply Markets

Supply Positioning®

How external providers view you

Customer Preferencing®

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Some Personal Thoughts

E

Procurement versus External Resource Management focus

Business understanding versus Procurement versus language

Proactive positive injection and being aware and listen carefully

Focus on NEEDS

Have high positive energy, never a bad day at the office.

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Some Procurement questions for Leaders

E

Have we ………….

Created the supply markets our organisation needs for it to succeed with its corporate strategy? Used “Category Management” to look strategically forward?

Recognised that Procurement increasingly viewed as a litmus test for acceptable behaviour

Moved measurement beyond “cost savings” into “Strategy Execution”

Thrown off the curse of ‘cost-reduction’ and ‘price focus’

Created corporate culture around ‘acquiring value - building value –delivering

value’

Thank you